Dear SaaStr: How Do Investors Feel About “Acquihires”? - The Entrepreneurial Way with A.I.


Thursday, February 22, 2024

Dear SaaStr: How Do Investors Feel About “Acquihires”?


Dear SaaStr: How Do Investors Feel About “Acquihires”?

Back when I started investing, in 2013, VCs worked on getting acquihires for their struggling startups.  A lot of energy was put in to find a “soft landing” for struggling investments running out of money, even if the returns might be nickels on the dollars.

Today?  VCs for the most part don’t care.  They don’t want to put in the energy to getting pennies on the dollar.

It still is helpful to VCs vs the human drama of shutting something down.  That’s not without costs.  And for smaller investments, no one cares.  If you put in $500k out of a $200m fund into something that didn’t work out, there are a lot of issues in shutting down a company, it’s a time sink with a lot of drama, and you don’t many any money, that way either.

And it is better for the team to find a good home even if the return is essentially 0x.

Maybe you can invest in the team again on the next one, and it’s much better for them.  And you don’t have to go through the headaches of a shut-down, at least not as many of them, usually.

But VCs don’t put in the time and energy they used to.  They just quietly letting the ones running out of money … run out.

The post Dear SaaStr: How Do Investors Feel About “Acquihires”? appeared first on SaaStr.


Jason Lemkin, Khareem Sudlow